Mumbai, Aug. 1 -- Prolonged periods of a strong US dollar are often associated with underperformance in emerging market equities.

In the month leading up to June end, when the US Dollar Index (DXY) fell 1.85%, the MSCI Emerging Markets Index-benchmark for global investors seeking exposure to developing emerging market economies-surged nearly 6%. But as the dollar index steadied through 28 July, EM gains also moderated, with the MSCI EM Index rising only 3.04%, according to Bloomberg data.

Whether this poses a risk to foreign inflows into EM stocks is now anybody's guess.

Prolonged periods of a strong US dollar are often associated with underperformance in emerging market equities.

In the month leading up to June end, when the US Dolla...